Does an employer have recourse when a whistleblower steals confidential information?

Does an employer have recourse when a whistleblower steals confidential information?

Companies routinely require employees to sign Non-Disclosure Agreements. These “NDAs” advance the employer’s entirely legitimate interest in protecting confidential and proprietary information. However, a question that often arises is the following: what recourse does an employer have when it learns that, on the way out the door, a former employee accessed extensive confidential information and sent it to their own personal email? Can the employer sue the former employee for breach of contract? Will the employer prevail?

This is a topic which courts across the country continue to wrestle with. Resolving the issue requires striking a balance between an employer’s legitimate business interests and the rights of whistleblowers to preserve information needed to advance their legal claims. While the law remains unsettled, most courts consider the following three factors in deciding whether to side with the whistleblower or the employer:

1. The scope of the information taken.
2. The relevance of the information to the whistleblower’s claim.
3. To whom and for what purpose the whistleblower disseminated the information.

As with many of the red-hot topics which are percolating in the whistleblowing arena, remember that context matters. Whether a whistleblower can proceed often depends on a number of factors including which statute is implicated and the geographic jurisdiction in which the nefarious conduct arises.

Employers facing this issue are strongly advised to immediately seek legal counsel to help sift through these thorny issues. Please don’t hesitate to reach out to your Littler counsel for assistance.